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Squawk on the Street

News/Business. Melissa Lee, Carl Quintanilla, David Faber. Opening bell market action. New.

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03:00:00

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Us 29, Europe 24, At&t 17, U.s. 17, Apple 16, S&p 14, America 13, Obama 12, Romney 11, Randall Stephenson 11, United States 8, Washington 8, Carl 7, Schwab 6, New York 6, Germany 6, Geico 6, Gm 6, Athens 5, Elizabeth Warren 5,
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  CNBC    Squawk on the Street    News/Business. Melissa Lee, Carl Quintanilla,  
   David Faber. Opening bell market action. New.  

    November 7, 2012
    9:00 - 11:59am EST  

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that would say how serious he is. it would also say something about leadership. >> gentlemen, thank you both. we'll have you both back very soon. that does it for us today. make sure to join us tomorrow. right now it's time for "squawk on the street." >> whether i earned your vote or not, i have listened to you. i have learned from you. you have made me a better president. with your stories and your struggles, i return to the white house more determined and more inspired than ever about the work there is to do and the future that lies ahead. >> president obama wins a second term in the white house but of course now the hard part begins. can he and congress agree on how to avoid the fiscal cliff just 54 days from now? good morning.
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welcome to "squawk on the street." i'm carl quintanilla with melissa lee, jim cramer, david faber. as you can see once again, down triple digits. a lot of news out of europe today as attention turns to greece and parliamentary vote there regarding austerity measures later on. democrats gaining seats in the senate. republicans maintaining control of the house. >> the issues that were a tossup are now certainties. we'll get cramer's take on how to align your portfolio right now. >> ecb president saying the euro crisis is hitting europe's strongest country. >> we're on storm watch in the northeast once again. airlines canceling flights with
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american airlines shutting down in new york this afternoon. >> of course we begin with last night's election. the president winning a second term defeating gop challenger mitt romney. it was battleground state ohio that put the president over the top. it was status quo election. democrats keeping control of the senate. republicans, the house. in his victory speech, the president outlined some of what he hopes to accomplish early in his next term. >> in the coming weeks and months, i am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together, reducing our deficit, reforming our tax code, fixing our immigration system, freeing ourselves from foreign oil. we've got more work to do. >> here's what does not change as a result of last night's election. dodd-frank, financial reform, obama care unlikely, probably impossible to repeal now and fed chair ben bernanke will serve out his term until 2014.
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not only did you guess correctly, jim, you said it would be decisive. you also said that futures would not uniformly be negative and we're not sure why they're down at this very moment. >> i think there's always going to be a perception that the run yesterday was because of a belief that romney had this late surge. on our own coverage that you did a fantastic job last night, we had republicans come on and say mitt romney is about to win and he had already lost. so there were people who really dug in their heels and i think that those people bought coal yesterday and they got the worst nightmare. elizabeth warren. selling makes sense because there was a run-up yesterday and buyers were romney buyers. >> strange move yesterday. let's not forget you mentioned election uncertainty is over and now we're back to europe to a certain extent. there were comments that seemed to have scared investors a bit.
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as we said so many times, some days you may see comments like this that wouldn't have an impact on our market. talking about germany and lack of economic growth in the eu not to take away from the reaction here to the election but that is part of the market today. >> that's the most important bank in the world. >> the calls for volatility today were in some degree correct. the mood that we're seeing in futures at least early indicating the move right at the open. it was predicted in part by the futures market. we expected volatility whether it be up or down. was it a surprise that on a vote for status question, we see a giveback in terms of the gains that we have seen so far this year? >> i think that's for real. i think that immediately the market does focus on the idea of the fiscal cliff. not the wrong thing to focus on
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given the dramatic and traumatic raise we would have on dividends. that matters. capital gains not as much. i think there's a lot of people who just kind of felt there would be a relief rally so i anticipate the relief rally and now we're stuck with europe and comments are bad. we are stuck with the idea that there's what i call an outlaw josie whales feel. there are people in the tea party that say, okay, this war is not over. you have the group of people that say that didn't matter. those are people who will stand in the way of compromise. >> this is what kudlow was referring to last night when he said gop will have some internal soul searching as to whether or not they want to have election after election where large portions of a changing demographic are given to the democrats some say for free. doesn't have to happen. >> that's chuck todd over and over again.
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he's an energizer bunny. he makes me look like a -- >> got the goatee going. >> he was going over latino areas that did not get polled including florida and just saying one party figured it out. the other party didn't. >> if you look at individual stocks and sectors, yesterday you got at the point where you go by sector and not risk on, risk off broader mark. we see that here. financials are seeing softness in pre-market. coal stocks seeing softness. there is a notion that now there will be more reimbursement for patients who previously couldn't pay for their care and so that will be a huge tail wind for these stocks which goes to buy from neutral this morning. >> a couple guys piled on hca. i do feel that you're supposed to sell the medical devices because there's a tax on them. things are playing out the way
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we would expect. i do think that the market is not understanding the power of what bernanke is doing in housing because you would get the firing of bernanke very quickly, okay, and you're not going to get that now. he's obviously contributed. the rates are down any way. i just think that if you bought bank of america because you thought romney was going to win and that was your reason to buy bank of america, if you own bank of america because you think there's a solving of housing situation, why would you sell it? i would use that as the extreme example. bank of america was perceived to be the bank that benefits the most. >> we have removed some uncertainty. if romney won but democrats had retained control of the senate, for example, there would be great uncertainty as to whether the affordable care act would be overturned or whether dodd-frank would be overturned. now we know they are going to stay law. that's it. it's over and done with that debate. you can make a decision one way
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or the other based on groups most affected by those laws which are coming into effect really in 2013 in their fullest way. positive or negative. >> we didn't know this time yesterday whether we would have hanging chad. i am old enough to say i covered the 1976 election. i had a headline that i wrote that says mississippi puts carter every the top. that's the stupid thing did you when you're young. you look back. 332 are going to go for obama. if ohio had closed at 7:00, virginia closed at 7:00 and we got instant tallies, you would have said what's on at 10:00? obama took it big. we lost indiana. that was a walkover. because of the way it's done, we sit there and we say oh, my. colorado. put him over the top. in 1976, i was such an idiot to write that headline about mississippi. i see other people following in
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my footsteps. >> the president did focus on really what the main economic issues in that brief clip that we had. tax reform. the budget deficit. immigration you can argue. we had a ceo saying he couldn't get engineers that he wants. and oil and gas. of all of the four things for him to mention, interesting that it was those as opposed to perhaps some other issues. >> and we'll get -- we'll get some early symbolic signs as to how much he's -- how far republicans are going to push and how far obama is requesting to reach out. >> i'm getting rid of the fiscal cliff name. michael is my favorite strategist in the world at jpmorgan. he's calling it the mutually assured fiscal destruction. this is dr. strange love approach to it. it is. if you're a holder of stocks and you're in con ed and you were hoping that epa would be dissolved but you have to rethink if this is not your
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i.r.a. or 401(k). >> because of dividends? >> a huge increase in that ordinary income for me that's very high. if i own stocks, i was looking at my dividend, geez, this is a sucker play. >> if you had big gains in any particular stock lake apple or whatever, would you sell now? does it pull forward and put pressure on stocks until the end of the year knowing that taxes will go higher? >> or do you wait for a special dividend that we keep hearing will come toward the end of the year? >> special dividend talk. i'm a stay the course guy. i understand anyone who said i got a huge capital gain and the stock has to go up ten more points to make it so that i should hold. >> okay. we do have certainty on these issues. there's also post-election uncertainty that involves the fiscal cliff. we're 54 days away from tax hikes and spending cuts that many economists and business leaders say could send the u.s. economy back into recession.
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here we have an interesting divide between wall street and washington. wall street seems to believe and you can take a look at the numbers on how the market has acted over the past year. wall street seems to believe that we'll avert this cliff. washington seems to be willing to drive over the cliff. >> i think there's -- i don't want to pick on the tea party per se. you can say if obama would suddenly give in on taxes. what i worry about is there are people who are ideological in the country and more focused on other issues than taxation and money. those people i think are very much out of sync with other people as we discovered last night from the election. they could care less about the fiscal cliff. i think some people want to go over the cliff. >> howard dean last night, sam on "squawk" a couple weeks ago saying maybe it's the best medicine for us is to drive over this thing, go into a recession, provide some bed for growth in the second half of the year. it's a gamble. >> $5 trillion in cuts. get budget deficit worries off
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people's minds. you have to imagine it's a strong negotiating tool. and a lot of this could be just posturing. probably is. >> he was great engineer. idiot as president. sorry for anyone related to hoover. he believed in that fiscal solven solvency. people said, wait, he wasn't that rigid. give me a break. the hoover plan ushered in a lot of policies that some people in this country hate like social security, medicare. >> those are entitlements that are going to need to be reformed as a part of an entire approach top fiscal rectitude in this
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country. >> management says it has to be like this. do you like that? >> one would hope both sides could forge a compromise. >> we have an example of what happens like in europe. europe is in the spotlight this morning. greece's lawmakers set to vote on painful austerity measures allowing the country to receive additional bailout funds. the central bank expects euro at the scene recovwill remain. hard to imagine anyone sees that as news. we saw some figures this week that show this. >> it was well below what had been expected and there are concerns about the german economy. spain where that is and so many others. no big surprise. always something of a surprise in terms of what issues we pay attention to in our markets and
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days that we've seen things that we said that's worrisome or perhaps that's positive but our market focuses on something else and then days like today where you might at least make the argument, we'll see, that there is a focus on europe once again now that we cleared up who will be president for the next four years. >> interesting piece that came out. you have to read everything these days. >> you read it in original german. >> of course. >> was that yiddish? >> exactly. >> just making sure. >> german and yiddish are very close. the notion of how many times geithner talked. this administration putting this out because administration works closely with europe and romney administration as we know from michigan debate that we were at would not make those calls. just be aware that's another difference between the two.
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>> when we come back this morning, the u.s. must resolve the fiscal cliff to maintain that aaa credit rating. we'll talk to the man taking the call coming up, david riley and at&t raising its dividend this morning. news about capital spending. david faber has an exclusive interview with ceo randall stephenson live from new york city. futures look weak down 1/14. "squawk on the street" live from post nine is back in a minute. i was in the ambulance and i was told to call my next of kin. at 33 years old, i was having a heart attack. now i'm on a bayer aspirin regimen. [ male announcer ] be sure to talk to your doctor before you begin an aspirin regimen. i didn't know this could happen so young. take control, talk to your doctor. ♪
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welcome to the world leader in derivatives. welcome to superderivatives. president obama enjoying an election victory. phil lebeau joins us from mccormick place in chicago where the speech took place talking about the mood there today and the hard work begins again. >> reporter: it will be interesting to see over the next couple of weeks besides the fiscal cliff what else do we hear from the obama administration in terms of priorities for the second term? as you mentioned, it was just a few hours ago that the president came out and gave his victory speech and even though he did
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not win all of the swing states, keep in mind he won 7 of the 9. north carolina going to governor romney. florida still too close to call. during his speech he taouch tou a number of topics. bringing democrats and republicans together in washington to resolve a number of issues. >> i believe we can seize this future together. we are not as divided as our politics suggest. we're not as cynical as pundits believe. we are greater than the sum of our individual ambitions and we remain more than a collection of red states and blue states. we are and forever will be the united states of america. >> so what's next for president obama? obviously the fiscal cliff talks and already we're hearing that house speaker boehner plans on addressing that issue at least initially this afternoon.
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president obama does return to the white house this afternoon. he has no public events scheduled but i imagine it won't be long before we get an indication of what will happen over the next couple of weeks. one last thought, having covered this campaign and looking at the auto industry, it will be interesting to see what happens with the treasury department's stake in general motors. it's about 25% of gm. all through the campaign gm said we're not commenting at all about the government stake because it was a hot potato. now interesting to see if perhaps within the next six months or so the treasury department says let's start unwinding that position. >> especially now that they have that multibillion dollar credit facility. thanks so much. >> he called it right here. cramer, of course. pounced on pundits predicting a win for obama. what new bold calls does he have for you and your money this morning? find out. his mad dash is next. later, zillow ceo spencer
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rascoff. let's take another look at futures as we digest from the results from yesterday's election. dow looking to lose 100 points at the open. much more "squawk on the street" straight ahead. what makes the sleep number store different? you walk into a conventional mattress store, it's really not about you. we have so much technology in our store to really show the customers what's going on with their bodies. this is your body there.
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everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. >> just about six minutes before the bell on a wednesday. let's get cramer's mad dash a day after the election and so
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many calls being made in the health care sector. >> both bank of america and goldman sachs really dump on hu hum hum hum humana. they say that you have to buy hcn. hospitals get that immediate boost from aca and now these are calls that seem obvious. you talk about the romney surprise. the people in the market. you were hosting this and they said at 8:30, 9:00 that romney had it in the bag. you might have been shorting hca if that was the case. >> ubs on uhs. >> i find it more undervalued. it's very liquid. i want to be careful with these. in the end you have to deal with
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the next quarter. that's probably not such a blowout. we always want to project what will happen in 2013. then we realize we have to deal with what happens aftermath of 2012. i don't like these trades so to speak. i don't like hospital stocks. i'm not going to trade off it. >> these obvious calls. >> obvious calls. >> going long hmos and going short goal, is that trade done? >> coal is the one i would say be careful and should sell. that's a stroke of a pen. romney could have got those epa guys out. epa gets more entrenched. you are getting the word right now that says phase out those coal plants. get them closed now. you switch to natural gas and that's bad for coal and bad for norfolk southern and bad for csx. >> what effect will elizabeth warren have in the senate as
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well? meantime, can the fiscal cliff be avoided now that the election is over. it's the big question on minds of corporate america. we'll explain what's at stake and what it will take to rise above partisanship. a live and exclusive interview are randy stephenson. at&t ceo. we'll hear what he tells major investors today. it's wall street's turn to weigh in on the election. opening bell coming up in less than four minutes. we don't call this our company, we call this our mission. green toys teaches children that if i have a milk jug and i stick it in the recycling bin it can turn into something new. chase allows us to buy capital equipment to be able to manufacture in the states to the scale we need to be a global company.
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he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing
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and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade. futures are negative this morning. one thing is for sure. the day after the election, the mood at least online, on twitter, out there on the floor, it gives us a chance to get back to talking about business. right? getting politics amended in some ways is important. getting the sides to talk is important. there are fundamentals going on that have been ignored.
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>> i think there's a lot. they've been hit. there's no denying they get hit. a lot of other companies are circling back saying that was a good quarter. that was a bad quarter. it's case by case again. i love case by case. >> that is what you do. here at nyse opening bell. look at the s&p. lehigh gas partners celebrating its recent ipo and top chef seattle. can you tell it's obvious how i read that in. >> she's not here. >> that's why i'm going to the nasdaq right now. >> i was on vacation. she was next to me. it was, like -- my daughter says what's the matter? your eggs are getting cold. >> it's unbelievable how beautiful she is. let's move on. >> randall stephenson is coming
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on. >> they are having the annual investor conference that began at 9:00 a.m. they put this press release out detailing what does appear to be an additional amount of capital expenditure or capital spending over the next three years. 14 billion. that appears to be above what had been anticipated for the company a bit. and they also increased dividend. that is not a big surprise of course. we'll talk to mr. stephenson about those decisions and as you might imagine about a lot of other things. he's been outspoken in the past on conference calls and the like in terms of regulation and clearly targeting the obama administration. would tell see what his thoughts are there. we'll talk about the sprint deal. there's so much different things to talk to about at&t and not to mention they sell iphones too from what i hear. >> you need 20 minutes for this. >> we do need 20 minutes. i don't know if you'll give it to us. we'll take it. >> profound weakness in technology at the start with big
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cap tech stocks that were market leaders for this year looking to give up gains. microsoft down 1.5%. google down. intel down more than a percent. we're seeing tremendous weakness in germany. we mentioned german industrial output number at 1.8% decline for the month of september. germany at session lows. german stocks trading in the united states are seeing weakness such as sap down 12.6%. there's one area of the market to watch as we did have ecb president saying finally the eurozone crisis appears to be hitting germany and we see that now with nick data. >> it's interesting. i wonder how many points we have to go down before people in washington say we ought to solve this. then again, if you're a hard right republican, maybe you want to throw us in recession to win on 2014 election.
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if you are hard left democrat, maybe you like the defense budget being cut. >> does congress want to see retirement plans go down by 15% to 20% because stocks will -- that's what estimates are are. citi saying a 15% drop if we go over the fiscal cliff even temporarily. that's a huge hit to confidence, to psychology. >> don't forget we talked about sequestration of defense cuts. there are other cuts that democrats support. by the way, democrats are not necessarily against defense. obama's defense spending number was still for an increase. we do need to cut defense along with so many other things. >> do you think -- >> in order to get on the right path. >> how much of the sell-off is people saying we need to undo the last couple days because that was a romney rally. and how much is we're not going to solve the fiscal cliff? >> i don't know. i know we'll have this conversation a lot. >> we had a lot of talk for spain for a couple years. we can handle this.
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>> we did indeed. we can talk briefly about a couple big media companies reporting numbers. news corp after the bell last night. time warner this morning. both stocks are actually up although both quarters a mixed picture in some ways. investors reacting positively. news corp for its part, international satellite was weak. publishing was weak. networks were strong. very strong. that seems to be where the markets came off of right there. as for time warner, a lack of revenue growth. no revenue growth whatsoever. revenue number did come in light. the market does seem to react positively. a lot of that due to what we know has gone on so often in media over the last year. buying back an enormous amount of stock. that continues to be the case at time warner. people don't mind if you miss because it's film. everyone gives film a pass because it's up and down. we see stocks amongst very few others that are in green this
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morning. >> it's an obvious leadership name to look at. i think 574 down a percent this morning. people will look for that to find a bargain price here. >> they lost this case last night that came over very late at night. i was watching the states come over and it's a texas verdict plus 300 million. there's a dispute. i know herb greenberg is working on a story of how good this is for apple and there is a 38% short position and i think people are saying apple has to come to the table. apple might have done it any way. >> apple is a big gainer for the year. do you think now that perhaps all of these big gainers are in crosshairs of people that want to lock in gains at a lower tax rate than is expected to be the tax rate in 2013. apple is dicey. it gave up the july lows and now it seems that may lows are next
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targets so next support could be 528. that's the key support level for apple. that's a long ways away. >> also hasn't been a good couple days on the legal front for apple in particular. >> putting on my hat when i used to cover small institutions and individuals when i was at goldman slacks. you would pick up the phone and say i want you to be aware that it might make sense to sell apple because it looks like capital gains will go up and you read that omb budget thing. you get the sale. you get revenue in for the company. you argue that's a reasonable call to make. >> we have the etf and dow jones dividend index, that is down by 1.3%. pretty much in line with the overall sale of the market. is that what we're seeing in effect here that even these safe haven what had been safe haven dividend plays are now up for
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sale? >> that ordinary income rate is devastating for people who have their mad money in stocks that pay high dividends. >> shares of at&t are down sharply over 4.5%. i don't know if it's because of increase in cap ex that was unexpected. >> there are analyst on the street that covered stocks saying they are overvalued and stretched on valuation basis so wouldn't these be the first stocks to go. >> you are getting volatility you talked about yesterday. >> verizon and at&t. >> cash flow. >> spot on options market with s&p down 22 points right now. let's go to bob pisani with more on what's moving this morning. >> the important thing is one uncertainty is down and one more to go. this is good news. i said yesterday biggest fear of the street wasn't necessarily obama winning although they were not in favor of that happening. it was nobody winning. that didn't happen.
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now they have to deal with fiscal cliff and a lot of people believe that a deal is achievable down here. i believe too. that's why we wear these rise above buttons. it's not a slogan. it's what i have believed for a long time. it's not just first quarter but all of the way through 2013. that's what i think is going to happen here. republicans can make a claim here that they're not voting for a tax increase as long as they stay below the bush thrush ho s a lot of people thought obama would be an immediate disaster for stocks. the market is down. the market was flat until he came out with comments saying economic slowdown reached germany. that happened 7:15 eastern time. that's when the euro took a dive. dollar moved up and all global stock markets moved to the downside. we're weaker on the comments and not on obama. a couple things on sectors moving, maybe bailouts are raw.
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i have problems with them. campaigning on auto bailout was a winning strategy in ohio and michigan. any that doubt that, i do see ford and gm to the downside. we have active trading in defense stocks around here on the corner just at the open here. they're down. sequestration can be avoided. i said that yesterday. a lot of people believe that today. status quo in congress is going to lessen defense cuts that will be coming. they'll be coming. that's why they're down. leadership of the defense committees, that's likely going to remain a net positive for defense stocks overall. health care, anyone who doubts obama care is now a foregone conclusion. love it or hate it, it is. hospital stocks, trading up. medicare managed companies are up because medicare coverage is going to be expanded here. energy stocks, exxon is around here. coal stocks down. exxon down a bit here. maybe 1%. i think the important thing here on energy is the status quo is being preserved in congress. that's going to make it less
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likely they'll have success in eliminating the tax preferences for energy companies that are out there. i expect an attempt to do that here. how about banks? most banks are down 2% right now. dodd-frank changes are less likely at this point and concerns about more regulation here. high end retailers, i see weak. tiffany was weak. coach was weak to the extent that tax cuts on wealthy are coming into effect. finally, the one thing i would hope for, let's hope for more reproachment between wall street and obama. geithner is stepping down. there's a chance. on the downside, elizabeth warren won in massachusetts. she's going to be a gadfly for regulation. >> this call is something traders are talking about in terms of why we see lower prices here particularly in industrial commodities. the fact that we are liken to see status quo in congress and
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what that will mean for the fiscal cliff. there's concern about growth. the weakness in the euro is a factor. copper is lower. palladium is lower. precious metals are benefiting. there's the belief that we'll see fed chairman ben bernanke in there or more continuation of that and continuation of lower interest rates. that's something that traders liken and that's why they're in the gold market. the fact remains whether or not we're going to see some of these endless predictions of $2,000 gold or 2,200 gold presented when qe3 was announced, that remains to be seen. we're seeing support in the gold market. back to you. >> with the presidential election in the books, what does the future hold for chairman
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as we see there, sharp declines across the board with 1.3% losses for the dow, s&p as well and nasdaq. pronounced weakness in the financials. a lot of those stocks are down sharply. morgan stanley down 4.25%. apple down 2% so far on the session. general electric down by 1.3%. selling is broad based at this hour. jim, you were talking about the pressure on stocks into the end of the year not just because of concerns about fiscal cliff at this point but concerns about tax rates which could facilitate
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and accelerate the selling. >> i think that the logical one to go after if you feel negative would be retail. that's what fiscal cliff takes out of day-to-day person is ability to go to macy's and stock is up nicely today and maybe you say, that's a chance to sell macy's. i like macy's. those who think the fiscal cliff means you have to go down a lot, i think retail is the logical place to sell. >> there's a pushback on that. if rates remain low and bernanke in place, people will continue to refi. we've seen evidence that is going to discretionary things. >> payroll tax cuts have gone away. when you look at the actual tax revenue where it comes from, it comes from everybody including people who are probably more strapped. i don't know. i still hold out hope. i wonder whether the market
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doesn't have to go down before that hope gets released. >> i wonder if you think -- the question online is it europe or chicago today? >> it's the right question to ask. i'm not sure. i haven't had a chance to talk to enough market participants to get a sense of what their thoughts are. maybe both. revisiting europe coupled with disappointments as a result of the election results. i do wonder on this talk of a fiscal cliff whether we'll start to see -- we don't have that much time left on the year. special dividends. we've seen a few. we haven't seen perhaps as many as some had anticipated. forget it going to regular income. if there's even an agreement, we know taxes will go up on dividends. capital gains going up a bit. george lucas sale some speculated including myself, was that done? we're running out of time to close a deal before the end of the year. perhaps more special dividends. not as much to imagine to see actual sales as a result of
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getting ahead in the increase in cap gains. >> if romney won and you lose the bernanke put, would it be any better today? >> i would say that's a really good question. there's the flip side argument that gold would be tanking, i assume, today. >> it's so easy to say sell everything. you just never -- it's been a sucker game to do that. i do think that if you think capital gains tax has gone up, you can make the case you can take something off the table. >> with the election behind us, we're going to turn our attention to the northeast and weather. a week after being battered by sandy, storm stricken areas are bracing for a nor'easter as hundreds of thousands do not have power and a new flooding threat looms. want to check in with meteorologist todd gross back at hq. >> it's more than that. there's a real threat of significant snow in the new york metropolitan area and that's one of the things we're going to be discussing because there are still leaves on the trees, my
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friends, and that does not bode well as we saw one year ago when you have leaves on the trees and wet snow, it can be a major player in how the storm ends up. i'll explain what i mean. first of all, if you look at the satellite and radar combined, you can see the bright colors moving in on long island and moving in on new jersey. that is the actual first wave of precipitation coming in from this knockout nor'easter. there's already big winds from the storm. the big winds are in eastern massachusetts. nantucket gusting to 50 miles an hour already. there may be minor coastal flooding from the jersey shore through long island. serious coastal flooding south of boston and down toward cape cod. what about the snow? there's a cold pool of air over southeastern new york into northeastern pennsylvania that will get sucked down toward the new york metropolitan area this afternoon. that's where the big wild card is. we know several inches of wet snow will pile up somewhere in new jersey up through southeastern new york to the
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northwest of new york city. what about the city itself and western long island, southwest connecticut, where the trees have leaves on them. why is that so important? we're just recovering in that vicinity from the power outages now. when trees get leaves and snow falls on those leaves, it brings downed branches and starts a new round of power outages all over again. we'll know much more in the next couple of hours as precipitation first moves in and we'll play it throughout the afternoon step by step to see how it's going to pan out. >> all right. thank you so much for that. todd gross back at headquarters. today is back to lining up defensive plays for your portfolio instead of lining up at the poll sites. cramer's post-election edition of six in 60 is coming up next and now that the election is over, the next stop is the fiscal cliff. can the white house and congress rise above gridlock and strike a deal?
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dow is down 169 turning into an important day here. what's coming up? >> fresh gridlock on capitol hill. we'll discuss the fiscal cliff in greater depth in the next hour. and we'll get specific advice on your portfolio. at what level would america be stripped of its aaa level. we'll have the former car czar on the program and ceo of zillow. a packed second hour of "squawk on the street" on a very important day. back to you guys. >> 6 in 60. six stocks in 60 seconds with jim cramer. goldman with a sell. >> natural gas, truck engines, people thought this was a romney play. wow. a good company. sell. >> walk me through in naval ship builder. >> if you were like romney and want more naval ships, you have to use their shipyards to build. >> impact of elizabeth warren on
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banks. >> capital one is great performer. no fan of jpmorgan. david will talk to randall stephenson. upping their budget. towers are the place. they need it for best service. numbers are not that good for the diabetes pill. stocks are up on speculation. >> how about steel? >> steel market intelligence. mentioned last night. tremendous dumping from asia of oil. tubes that you need to build pipelines, chinese. dumping. asia, dumping. these guys make it too. >> let's talk about mad tonight. are you having to frame the show in your mind knowing what is happening right now? >> i think sandy has been left out. i have bruce springsteen. just kidding. >> i would believe that. >> everybody looked. i got a rise out of faber even.
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clean harbors, we had dirty harbor that has to be cleaned. this is the most speculative stock i follow. made a lot of money for people. $4 stock that some people think -- both of them. rolled his eyes. i got a home run. >> about a half hour ago you asked whether or not this selling right now is undoing the hopeful romney rally of the past couple days. >> those stocks are hit very hard. i think that the correct focus on this mutually assured destruction of fiscal cliff is going to stay with us because you are going to have to pay much higher taxes on stocks. just plain and simple. it's too easy a call for broker to make. i would call everyone at goldman right now. the calls are being made. >> we'll see you tonight. >> great job last night. >> thanks a lot. and to you. we'll see you on "mad money." when we come back, four more years for your money.
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>> if you are just waking up this morning, somewhere in the middle of the country having stayed up late for election returns, we're in the midst of a post-election sell-off. dow is down 200 points. s&p down 20. nasdaq 38. hard to say whether this is centered from the election, from weak data in europe, markets are having a tough day as we get started. road map for the next hour. a triple digit sell-off on the dow. two major factors in play. president obama being electeded to a second term and concern about europe's economic issues hitting germany. >> and rising above the gridlock. now that there is certainty in the white house, we'll see if
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politicians put partisanship aside and come to an agreement to avoid the fiscal cliff. steve rattner joins us. >> post-election look at the housing market where the ceo of real estate information provider zillow shares of that company taking another hit after fourth quarter warning sends the stock tumbling yesterday. we'll start with the elections. our chief washington correspondent john harwood at headquarters has gotten very little sleep. has a look nonetheless at president obama's path to victory and how it all went down. good morning, john. >> good morning. i want to talk about the result of the election at all three levels of government. start with the race for the white house. president obama who went into election day leading narrowly in most of the battleground states and leading narrowly in the popular vote got exactly that result. it looks like he's going to get about 50% of the popular vote. 2% ahead of mitt romney and so far with florida still
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outstanding, the president has won every single swing state except for north carolina. he lost indiana, which had been in his coalition in 2008. he lost north carolina. he's won all of the others which is a very, very substantial victory for him. now let's look at the congress because that's the other half of the equation for the fiscal cliff. democrats were strengthened in both houses. first of all, democrats held onto control of the senate. they went into the election with 53 seats. they've got 53 right now. there are two outstanding seats in montana and north dakota but in both of those seats the democrat is leading. we'll see where those races end up but signs are looking positive that democrats may actually come out with more seats in the senate than they had going in which was thought to be highly improbable because democrats had so many seats at risk and republicans once thought it was a slam dunk that they retake the senate. and then finally in the house of representatives, still a bunch of recounts and bunch of close races not settled but both democrats and republicans tell
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me it appears that the democratic party has gained seven seats in the house. republicans still have the majority. it's a smaller majority by these results. it was a very, very good night for democrats across the board. i think the first thing that's going to happen is the resumption of negotiations with president obama and democrats having a stronger hand than before the election. >> now that we know president obama will have a second term, how should that impact your investment strategy? let's bring in the chief market strategist with alliance bernstein whose firm oversees $400 billion in assets and david kelly, strategist with jpmorgan funds who sees 4$400 billion of assets under management. how do you interpret today's sell-off? >> there's a risk off trade. nothing particularly unusual about it. many of the trends that we've seen in place over the last two or three months are likely to
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continue. we still have strong momentum in housing. we have seen inflation trade over the last couple months. no change in the political landscape. it's hard to imagine that you will see a significant change in the mix of performance. having said that, you will see some downside volatility as we see now as we continue to see uncertainty about fiscal cliff. >> nothing has changed necessarily except the fact that we presume that taxes on dividends, taxes on capital gains will go up. i wonder if you think this is the beginning of pressure on the stock market because people want to lock in gains at lower tax rates. >> i think that could be part of it. there is a significant chance now of increase on taxes for individuals as they try to work in a compromise on the fiscal cliff. you have two forces in operation here. you will have people trying to lock in capital gains but you may also have companies who issue special dividends and try to get money back to
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shareholders over the course of the next few weeks trying to avoid higher dividend taxes. that money could get reinvested back into the stock market and you have companies that pay bonuses that will pay them before the end of the year to higher income employees and again that money may return to the stock market. there will be different tides here. not quite clear which way it works. we do know uncertainty is still there because of this divided government and we need to see some resolution to this fiscal cliff issue. >> in general is the smarter tact to wait for a would-be special dividend because you miss money on the share price itself. >> the smarter tact is to try not to play this one. temptation is to say there will be market chaos because of the fiscal cliff issue. remember in 2011. the real message of 2011 is don't panic because when government is forced to make a decision, government makes a
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decision. i think the worst thing you can do is jump out in the middle of a sell-off and then have the president and speaker boehner come out on the white house lawn and say we have a deal. you watch markets shoot up and you have missed the rally here. there is clearly a negative because of potential for higher taxes. there could be a positive with longer term direction on taxation which frees up a lot of money that's frozen right now. it's not clear how this playing out. as a long-term investor stocks look cheap particularly look cheap relative to cash and fixed income. i wouldn't want to send money the other way. >> one of the things that you might want to work out is whether this is a buying opportunity. what is the picture -- let's say we get through the fiscal pict the line? will markets want to rise because economies are getting better or markets that will be in difficulty a year down the line because economies are getting worse? the biggest economy in europe,
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germany, is likely to contract in the fourth quarter but housing very importantly is bottoming here in the united states. can you answer that question? where are we one year down the line? >> i wish i could answer. i think you'll continue to see a modest degree of real growth. you have a lot of reasons for modest degree of growth. the big issue for equity investors is what is the rate of inflation and where will you see subpricing power. if current policies continue and this is important for equity investors, you'll see continuing underperformance by a lot of the dividend paying stocks and treasuries and at the same time the nominal growth rates will fuel reasonable earnings growth for corporations. i would think that trend is the one that's most likely to play out. >> so bottom line is it sounds like you would say to investors to start thinking about taking money off the table between now and year end. >> between now and the year end
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i would expect some cyclical stocks that have had a huge run, some commodities and industrial cyclicals that have been anticipating a rebound in china, they may pull back on the risk off trade. some guys that are being hit today, some of the health care and defense stocks may actually rebound between now and year end and i would like to reassess once we have clarity of fiscal cliff. >> we'll leave it there. thank you both for your time. we also want to remind people of this goldman sachs note that came out at the end of september. interesting one. it identified companies who could issue special dividends between then and end of the year. they got it right. they flagged other stocks which in this day after elections is worth pointing out. franklin resources, western refinery, some of the stocks that might pay that special dividend. >> one of the biggest names in silicon valley is calling out washington. google founder sergey brin
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calling it a bipartisan ship. political battles in d.c. calling on election winners now to govern as independents instead of along party lines. speaking of putting politics aside, those in washington will need to rise above partisanship to reach an agreement to avoid the fiscal cliff at the end of the year and they should do it quickly. the newly re-elected president obama will need to secure an agreement to main the aaa rating for the u.s. good morning. >> good afternoon. >> okay. i didn't realize you were in europe. the clear implication is that you were ready to strip as s&p has done the united states of the aaa rating. at what point would you do that? >> the american people have made that choice. they cast their vote and now the ball is in the court of congress
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and president obama. if we take at face value comments made by president obama and governor romney last night that they would reach across the divide and if that's carried over to congress and president obama is willing to take decisions that doesn't necessarily please his base and we can get resolution of the fiscal cliff and get the debt ceiling increased and move forward with a deficit reduction program. if we don't get those things and we have u.s. tipped into recession as a result of the fiscal cliff and another fiasco over the debt ceiling, they will use the aaa rating and that will be bad news for the u.s. economic recovery. >> we have political deadlock. it's renewed political deadlocked. the issue is whether or not the fiscal cliff is in fact the way out of that. in other words, the suggestion this morning is let's sail past the fiscal cliff. both sides can talk about tax
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cuts to take this to a new normal. it's a political device out of where we now stand. if you saw that on the horizon, if you knew that we were sailing off the cliff to that solution, would you still cut? >> i don't think that scenario is the most likely one. the concern about the fiscal cliff is that not only would it tip u.s. potentially into a avoidable and unnecessary recession, but also it's not sustainable. it implies further cuts in discretionary spending without really touching some of the longer term spending pressures and it wouldn't address broader issues about tax code and measures to broaden the tax base. so it would be ad hoc and temporary and it would be a crisis in governance. if they can make decisions that defer the fiscal cliff as a move
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toward a grand bargain in reducing the deficit, that's a more positive scenario and that's good news in terms of the economy and in terms of the rating. >> is there a scenario in which the u.s. doesn't actually go over the fiscal cliff but you could see a rating cut happen because of the impact prior to fiscal cliff. some would argue that companies are already pulling back and that the impact of the fiscal cliff is being felt now prior to discussions in anticipation of it. is there a scenario in which there could be a rating cut and we don't actually go over that cliff? >> potentially there could be. the fiscal cliff is not the only issue that needs to be addressed. even if it's possible to avoid the forthcoming fiscal cliff, you also need to put in place a credible deficit reduction plan. there needs to be a grand bargain across both sides of the divide to address the deficit and provide some certainty over
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tax and spending policies going forward. if the fiscal cliff is avoided but there is no credible deficit reduction plan put in place. then the rating will come down during the course of 2013. >> david, is it clear to you, we have a frame work called simp n simpson-bowles as you know. we have added firepower of ceos making this a pet issue. does it matter if corporate america says we're behind this too? >> i think it does matter. it's encouraging that we've had a situation where business people, investors, are trying to put pressure and say this needs to be sorted out. this needs to be dealt with. the u.s., we believe, is the pieces are falling in place. i think you mentioned before about the housing market starting to heal itself. household sector has been paying down their debt. so it's falling into place. >> david, let me just -- we're out of time. i want to ask you this.
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does it really matter what you do? last time -- at times of stress people buy u.s. treasuries. we saw it with the downgrade from s&p. people will always get their money back from treasuries because the fed is underwritten the whole thing. keep printing and buying. people always get treasuries paid back. it will always be a aaa rated company. >> no. it won't always be a aaa rated country. printing money is not a solution to an underlying fiscal and longer term solvency problem. we know that from international experience and from history. longer term, it's unsustainable and something that you give and market will give if fiscal issue is not addressed. >> as we have seen in europe. thank you for your time. david riley joining us from london. >> the auto bailout helped president obama win ohio, which put him over the top for re-election. coming up next, we'll talk with
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steven rattner, a member of the fix the debt campaign. later, an exclusionive with randall stevenson from at&t. dow down 217 points. this is a 1.6% decline on s&p and the dow. nasdaq is down by 1.6%. much more "squawk on the street" straight ahead. for 30 some years at manyuperit different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter.
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dow is down 235. s&p down 25. 1,402. people are talking about near term support around 1,399. we'll see. in the meantime, mitt romney referencing partisanship in his concession speech as president obama has the challenge of bringing together a divided congress to find a solution to the fiscal cliff. steve, welcome back. good morning. >> good morning to you. >> fascinating night last night. we talked with you on this floor a couple days ago on fix the debt. did a mandate happen last night and who needs to make the first move if this cliff is going to be addressed? >> i'm not sure that it's a mandate in the sense of the word of being an ability to govern or your own because we have a system where the congress and
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president have equal say. i remember vividly in 2004 george bush woke up the next day and he said, i have political capital and i tend to spend it meaning he felt he had a mandate and that obviously didn't work out so well. it does take cooperation. there's no getting around that. i believe the president should make the first move. i think it's time for the president to come forward with a plan that will indeed fix the debt and then to engage with the folks on the hill and negotiate something that will involve a lot of pcompromising but will hopefully solve the problem. >> what does that plan need to say? does it need to be any different than the way he approached simpson-bowles. >> it was done over a year ago. there are things in it that would have to be updated. it's a frame work. there's no magic to every single provision of simpson-bowles. key elements are it needs to be big and $4 trillion or more and balanced between spending and
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revenue. doesn't mean one to one. needs to be an element of revenue increases and element of spending decreases. and everything has to be on the table including entitlements and it has to keep our debt to gdp ratio from continuing to rise and stop the rise in 73 or so percent range. that's the frame work. within that you are arguing about details. all of us as passionately as we feel over a tax gas increase or cut spending for veterans or this or that, we have to be willing to compromise and leave our special interest at the door and sit down and get a deal done. i've been in the deal business 30 years. i've gotten a lot of deals done. there are a lot of people in washington who have gotten a lot of deals done. it's time to do that. >> having said that, he's not the same man as he was four years ago. you can tell that from the election campaign. there was much more negative the more he ran than four years ago. i don't know if you saw this briefing where he was initially
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off the record and then everything went off the record. on one hand the bargain he was after was $1 in new revenue for every 2.50 in spending cuts. other thing he was clear was he wanted immigration reform and that would top the agenda. do you think politically with republicans in the house he might link the two and that the deal is broader than just the fiscal deficit? >> i don't actually. i don't. the fiscal deficit encompasses so much of what goes on in a legislative year. it encompasses near term issues of the budget and efncompasses our entitlement system and any one of those things would be a massive legislative project in itself. the idea of attacking immigration reform on top of that strikes me as not well advi
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advised. >> give me some odds. percentage likelihood there is a compromise and percentage likelihood we go off the cliff and percentage likelihood there is a temporary fix. >> i'll give you directional ideas. between now and the end the probability of a major budget deal, simpson-bowles deal probability is zero. there isn't enough time to do that. the best we can hope for is a frame work and maybe some kind of a down payment. each side gets something to show this will be a compromise. and then we extend the fiscal cliff deadline into next year and give everyone six months to try to really work something out. that to me is the most likely scenario. then i think it is possible we go over the cliff. i cannot rule that out. i think if we do it will be very short-term because the markets will react so negatively everyone will realize it's time to come back a little bit like what happened with t.a.r.p. in
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2008. so the really big question is when all of the dust settles, whenever it settles sometime next july, do we have major budget reform or have we muddled through and kicked the can down the road a little further. i think those odds are probably around 50-50. >> finally, gm has 42 billion in cash and credit. you saw the 11 billion in new credit lines from banks all over the world. when does this really happen in earnest, this taking back those shares? >> for obvious reasons that was not going to happen before the election. now the election is over. that's the implication of your question. what happens now? i do think it is in general motors interest and therefore the country's interest to disentangle this last piece of ownership between the two companies. i would like to see that happen. i would like to see gm afforded the opportunity to buy some of those shares back. i think some probably have to be
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sold in the market just to establish a market price for them so there's no question about the price. i do think gm shares are still depressed and not at their full value. i am coming around to the view that it's time for everybody to just move on and let gm be gm again without all of the government around it. >> i know you're not an analyst. if they're not at fair value, do you have a fair price target? >> when i look at it trading at two or three times i say to myself this company is cheap. the auto industry is on a recovery track. we saw that. interrupted by sandy and here and there but we are climbing back to 15 million to 16 million cars a year sold. there's no sign that the u.s. industry is going back to its bad practices of too many incentives, too much inventory. the only real thing ailing our detroit companies is what's happening outside the u.s. and
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obviously that is europe. that's helping fiat. it's hurting ford and general motors. >> good stuff. thanks so much for your time. i know you got very little sleep too. steve rattner. >> president obama's victory is a sign that health care reform is here to stay. we'll show you best ways to play the sector on a day that your money could use triage as we're down at this hour and spencer rascoff on the post-election picture and punishment the company took following the company's guidance yesterday. a post-election sell-off on wall street. dow down by 1.8%. s&p down also. >> at these levels worst day since june. >> much more "squawk on the street" coming right up.
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a number of health care stocks taking a hit today after president obama's victory cemented his signature piece of legislation. obama care is here to stay. barbara ryan is founder of barbara ryan advisers and former senior pharmaceutical analyst at deutsche bank. welcome to the program. >> good to be here.
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>> we've had two near death experiences for obama care. the supreme court decision and then the election and now people will see of course just beyond what it means for youngsters staying on their parents' health care plans. with he get the full rollout in 2014. mandatory health care for everybody. you are a pharmaceutical analyst but more broadly, what does it mean for the industry would you say? >> break it into two parts. services is where implementation of obama care is going to have its most significant effects. the fact that it looks like it's here to stay given the elections last night and obviously the supreme court decision, we see therefore the greatest volatility in the hmos negatively affected over time and hospitals which would be favorably impacted. we see impact on those stocks today. on the product side, i think the implementation of obama care has
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already begun and is well factored into the fundamental outlook for these companies. you see the status quo and no reaction to elections such as one we see in services. >> we should mention that hca was upgraded as a result of the vote last night. there is still a lot of questions, not least on health exchanges at the state level and of course the tax cuts. the tax subsidies. when the republicans look at how they're going to do some sort of deal on fiscal cliff, there's a lot of money that's being pumped into subsidies for people to get the cover that obama care provided and those presumably could be cut. >> right. there still is as you mentioned the uncertainty relative to the economy and how this is rolled out. specifically i think that what i would point to for investors is the outlook for the pharma and
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biotech space is relatively well characterized at this point and specifically on pharmaceuticals, valuations are really not very demanding. dividend yields remain high but that may be more or less compelling with what happens with tax reform. we do see an improvement in the new product portfolio in pharma and biotech. pfizer got an oral rheumatoid arthritis pill approved. we have innovations coming and i think the outlook relative to the environment that we see broadly in the economy and other areas of health care is probably the most visible. >> specifically for pharma, i'm an investor at home. i invested because they have terrific yields. they have seen huge gains for
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the year and big dividend yielders. potentially taxes could go up a lot on these particular stocks. are there any you think will be particularly susceptible to selling into the end of the year? are there ones where historical valuations are stretched and so they might be the focus of more selling than others? >> i guess that's a good point. i would point to a stock that has had a big run based on opportunities for alzheimer's disease and their new product portfolio. that may have a big impact in accelerating earnings past the patent cliff. again, it's hurry up and wait. there's probably not a lot of urgency to hold onto that one. on the other side, i would say a stock like pfizer where the companies are restructuring their portfolio businesses, which i think will drive shareholder value over the next nine months. there's probably less inclination to sell. >> barbara, thank you for your
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time. good luck with your business. barbara ryan joining us in the wake of obama care becoming a certainty. >> government inventory numbers have been released. sharon is at the nimax. >> east coast inventories for oil and gasoline hard hit but numbers nationally were surprising to traders. we saw a build in overall crude supplies of 1.8 million barrels, an increase of 1.8 million barrels greater than expectations. we also saw increases in gasoline fuel supplies nationally. that was a big surprise. we were expecting to see a decline according to many analysts. the supplies were up $2.9 million. supply rose by 100,000 barrels. i'm joined by tom riley. a veteran trader on the floor. this is surprising to you when you saw the numbers considering along the east coast it was as we expected, big drops in oil and gasoline inventories. >> biggest price was crude oil inventories. we were looking for a bigger build than that.
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gas inventories shows really weak demand across all of america. east coast is using a lot but the rest of america must not be using much at all. >> we look at demand. looks like demand overshadowing what we see in terms of the refining issues and the supply distribution issues that we see here along the east coast. back to you. >> sharon, thanks so much. sharon epperson covering the complex for us. when we come back, art cashin has seen his share of presidential le presidential elections and impact on the markets. we need his words today with the dow hanging on just 24 points above 13,000. financial reform stays in the white house along with obama and wall street's worst nightmare, elizabeth warren takes massachusetts. all bad for banks or is the headline fear overblown? we'll find out.
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close to session lows right now. let's go to bob pisani here on the floor. >> talking to jim cramer for all days to come in and make a comment, couldn't he have stayed home today and helped us all out? look at what happened at 7:15. futures were flat. there we are. we had a chart that showed where comments were made about germany now joining weakness. our markets fell apart. europe dropped on that. we went weak going into our open. we have since weakened from there. the important thing is look at the s&p 500 on intraday basis. the key point here is there were
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a lot of people buying on the weakness at 10:00 and 10:15. if markets drift lower, that's not a good sign to people who have been buying here near the bottoms at 10:00 in the last half hour or so. a danger zone here. you need to see stability and mild bounce. look at the sectors we've been talking about. hospitals. they are on the upside. medicaid managed care, medicaid coverage is going to expand. that is good for companies that are in that business you see. medicare companies, medicare advantage companies, rates are going to be negotiated lower. that will be the trend. that's what the market believed. that's influences companies like hum humana in that space. my opinion is congress will
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lessen severe defense stocks. you see them down today. coal stocks, we know about how obama feels about coal. overall you see moves to the downside. i want to note fracking names. companies that are involved heavily into fracking are seeing 3% and 4% declines. back to you. >> shares of apple teetering on the verge of bear market territory. the number to watch is 564. that takes it into official bear market. we're at 566.19. a couple dollars away if the trend stays intact. not having a good day. when we come back, shares of zillow taking it on the chin this week after the company issues weak fourth quarter guidance. look at advertising. spencer rascoff will join us on a first on cnbc interview next. >> if one ceo isn't enough for your taste, we have a double dose.
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at&t's chairman and ceo randy stephenson will join us in a david faber exclusive. bob, these projections... they're... optimistic. productivity up, costs down, time to market reduced... those are good things. upstairs, they will see fantasy. not fantasy... logistics. ups came in, analyzed our supply chain, inventory systems... ups? ups. not fantasy? who would have thought? i did.
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and the sustainable smart towns of the future. at panasonic, we're driven to make what matters most better. just another way we're engineering a better world for you. shares of zillow taking a big hit. spencer rascoff joins us from post nine first on cnbc. spencer, good to have you with us. >> thank you for having me. >> after poring through the press release, two things stood out. seasonal weakness in ads in the fourth quarter and more homes viewed on mobile versus desktop. are either of them the drag on the fourth quarter? is that the reason why we see the sell-off? >> mobile is a huge accelerant to our business. we're now a mobile company. a billion homes have been viewed on zillow mobile year-to-date. i think the reason the stock has had a rough week is because the
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guidance that it gave for fourth quarter revenue growth over 50% year over year was lighter than expectations because of weakness in the display business. it's much smaller business. bigger business is selling local advertising to real estate agents and mortgage lenders and that business is growing quickly. >> nothing to do with transition from mobile to desk top. not less profitable on mobile versus desktop. >> one is more likely to contact a real estate agent than someone looking at the desktop. >> i'm an investor at home. what exactly is zillow? what is it a play on? is it a play on housing recovery or play on real estate? i look at this stock and i see your stock being dragged down by weakness in display ads. if i want to get into the display ad business, i would go to google. invest in housing and recovery i would go to a purer play. >> that's a good question. we're a play on a couple things.
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a play on more and more consumers accessing information about real estate on the web and mobile and play on ad budgets, $10 billion they spend mi. agents spend 99% of their ad budgets on other websites and offline. am most categories we have seen ad budgets migrate to where traffic is and that will happen with zillow over time. revenue up 67% year over year on the quarter which is astounding because of this migration of ad buckets over to zillow. >> were you expecting the reaction this week? >> we don't manage business quarter to quarter and don't manage stock price day-to-day. i would say i'm surprised by it. it was a fantastic quarter. we beat revenue and announced key milestones including two acquisitions. it's a bit of a surprise. >> not too put too fine a point on it, your market
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capitalization lost a quarter of its value as a response of this. i appreciate you're still at 22% year-to-date. what does that tell you about floating on the stock market and interaction with the market? to have lost a quarter of the businesses value -- >> business hasn't lost a quarter of the value. the company is worth more today than last month than last year. it takes time for markets to catch up to true value of the company. we build a business for long-term. if we focus on tens of millions of users and tens of thousands of advertisers over long-term the stock price will take care of itself. >> you were the same with hot wire. doesn't necessarily mean that you have become the champion of the industry, does it, at the end of the day? >> we're all about empowering consumers with access to real estate information. >> you're trying to be the investor. >> if you took care of consumer over time, you'll take care of the investor. >> we've been talking fiscal cliff all day today and we'll talk about it for the next 54 days at least. how much are you focused on possibility we go over it and
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that exploration for real estate comes to a standstill in this country? >> our perspective is home values bottomed and we forecast 2% increase in home values in the next few months. that housing climate benefits zillow. an up market benefits us. we have done incredibly well even through the worst period of the housing climate in our lifetimes. zillow has grown revenue extraordinary through the downturn. >> not to say that you would welcome this though. >> we clearly are rooting for an upturn. we see an upturn in data. that's a benefit to us. to your original question, you know, i think it's a bit of -- don't buy zillow as a way to play the housing upturn. buy it if you believe that consumers will access more real estate information on mobile where we're the leader and web where we're the leader and more ad budgets migrate to where consumers access information. that's being played out in every
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vertical. google would never make money. they have that traffic. ad budgets move where traffic is. facebook for their troubles people said no one will ever advertise on facebook. that's where kids go to flirt. clearly they have a lot of revenue. ad budgets go to where traffic is and real estate traffic is on zillow. >> thank you for coming by. president obama securing a second term last night but the future could be different for the chairman of the fed. two former fed governors will weigh in on bernanke's future. and art cashin will reveal what's behind this move with s&p down 26 points. [ male announcer ] this is steve. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks,
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this is probably the last thing that the market needed. this is a live shot from athens where we are on day two of a strike and the parliament will vote on 13, 14 billion euros of austerity. if the bill does not go through this afternoon, they will not get their money from the european union. we will keep an eye on what is happening in athens. a very tense day potentially for the european crisis.
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>> meantime, stocks falling today. we have someone seeing his fair share of post-election selloffs and rallies. art cashin is here. good morning. good to have you. >> good morning. >> we were just talking off camera, there are some oddities going on among the indices. what is going on? >> we closed at 1428 last night. back in 2008, it closed at 1431. so in 12 years we haven't gone far for election day. the other thing is, for the inside baseball stuff for the viewers if you look at the three key indices, the dow, nasdaq, and s&p, they are all off percentagewise, 1.8%. they are constructed differently, weighted differently. that hints to me that a good deal of the selling may be computers. they are trying to extract a certain amount of cash out and only computers can do it that neatly. so i think that's going on. >> extracting because of what
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happened here last night or because of what was said this morning or why? >> well, i think it's a couple of things. i do think that there's a clear rethink. i mean, we worried about it being too close to call, dragging on, moving into the fiscal cliff, yet everybody listened to the words and i'm not sure they heard enough compromise on either side that's out there. the republicans don't have a real leader right now except for boehner. so who is going to do the negotiating there. you're getting what draghi said and we're trying to defend 13,000 and 14,000 -- >> we just lost 14. >> people are making a lot of what draghi said. the commission came out with a projection on growth for the next year in which it suggested that the eurozone basically wouldn't grow through next year
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and spain would particularly be rough within that. >> art? >> go ahead. >> for some, btig, the latest example, going off the cliff, is now their baseline because there are some political advantages for both parties to make this happen, painful though it might be. >> that's really the frightening point because you can talk all about it. you know, it's like taking some drastic medical cure for putting a patient in a coma to see if you can make them get better. i don't think the public or the markets are going to be satisfied with that and i think that you had an earlier guest who compared the possibility to what we had after the talk was voted down, which was an 800-point selloff. i'm not being looking for that but markets are vulnerable here. as pisani said, if they don't get them back to 1300, 1400, they are going to get restless. >> what is the fiscal haircut at this point? if we go over the fiscal cliff
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temporarily, what's your estimate? >> well, that's not my area of expertise but i would say that sounds pretty logical to me because things can begin to come apart. and if we get into this object stan nant mood again where it's oh, no, my way or the highway, that's going to be a real problem. >> you have arguably a president that cares more about raising taxes on the rich than the markets actually do? >> the real thing simon is that he's only got one term left. he's got to run for the history books. there are two ways to do that. one is to cooperate and leave with a glowing economy and the other one is determined that you do want to be transformative and be an idialog. we'll find out where we are going in the next few days. >> apple is in bear market territory. it's down 20% from the recent highs reached at the end of
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september. >> and almost at the same time we did lose do you 13,000. >> no coincidence. art, thanks. >> my pleasure. at&t raising its quarterly dividend. randall stephenson will be with us. "squawk on the street" will be back in just a few minutes. if you are one of the millions of men
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okay. well obviously the market is stating something. >> we're dealing with the big transition of power in power. we have jake to lead us through what to expect. tenneco will join us also. >> we'll see you tonight. >> very big day. >> we'll talk about europe in 30 minutes, too. >> it could be a perfect storm with athens. >> it's interesting to keep an eye on that. in the meantime, good morning. we are live here at the new york stock exchange. big selloff. the dow, as you can see from the charts, below 13,000 at 12,948. the selling is accelerated here.
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s&p has given up 1400 and the nasdaq. kraft food group reporting a higher third quarter and net income rising to 79 cents a share. interest your kitchen cabinet to the clothes on your maback, macs is raised and the full year profit outlook is raised. bank stock taking a hit on the chin today. that means the dodd-frank regulations are here to stay. what does that mean? that's coming up. and that means that ben bernanke is not leaving any time soon. what that mean for the monetary policy. plus, at&t increasing its dividend right here in new york, we have an exclusive interview with the man behind the scenes.
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at&t's chairman, randall stephenson, will join us live in just a matter of minutes. we'll start, though, with what president obama's second term means for monetary policy. bob is president of the dallas fed, an extinguished fellow for the policy analysis, also a cnbc contributor and robert is a cnbc could contributor as well. robert helde robert heller, what happens now? he's going to have big decisions to make when it comes time to reverse this policy if in fact you believe that is going to happen sometime soon. >> they will do everything possible to support his policies. they will continue to buy a humongous amount of debt and fi nan the deficit.
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>> bob, what about you? i guess it's hard to talk about a reversal of fed policy when you have a day like today and discussions like we're having regarding the fiscal cliff. is it somehow accelerated in the months to come given the risks in the near term. >> i think there's hope that it will come to an end at some point. i doubt that mr. bernanke is going to be around after the first january 2014. i can't imagine that he'd want a new term, although i agree with robert that that probably wouldn't change the course of monetary policy. i think at the very least we've got another year and a month of what we now have. >> yeah. does the current environment, robert heller, change your view
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as to how the fed is to act? we're already getting on twitter people asking, for instance, where that out of the ether fed call, that headline hinting at possible stimulus on a day like today, is that going to happen in the next few months? >> well, the fed can't do more stimulus. they already have their foot on the gas pedal full out and with the fiscal cliff hanging over us, they will continue that course. they will try to be a center of stability. but the problem is that in the long term they are seeding the seeds of a strong inflationary push in the country and then they have the problem of rating that bank. how are they going to pull back trillions of dollars in excess reserves without causing a recession? they will cause a recession. >> but there's no doubt in your mind about that? >> yes. >> there's doubt in my mind
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about that. qe 2 has been adding to bank reserves but it hasn't been very stimulative because banks haven't been converting that into money and since they announced qe 3, i don't think the fed's balance sheet has grown any and the money supply is not growing much faster than it was. so i don't think that the question of unwinding our exit strategy is going to come up for quite a while. >> yeah. but when it does, bob, are we do for a recession no matter what? is ripping off this band-aid going to result in bleeding? >> i don't think it has to be that way with regard to monetary policy. they can possibly manage the balance of the balance sheet without a problem. the recession, if we get one, is
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going to come from the fiscal cliff and dangers in that area. >> gentlemen, thank you so much for your time. robert heller, bob, important discussion. and in light of what is happening right now more so. thank you so much. we're seeing broad sell off with the major bank. the president winning over the white house for another four years. what does this hold for future regulation? jason, good to have you. it seems like banks are the center today. >> i think it's a little bit of both. the bank stocks have gone up over the last eight weeks. there was some pricing and a greater chance that governor romney would win. obviously that didn't happen. it's both. fiscal cliff concerns hanging over the group in general. most bank ceos talked about
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slowing growth and the number one reason is corporate bankers reluctant to take on additional leverage in the face of a fiscal cliff uncertainty and there was some hope among participants that romney would have been softer with respect to financial reform and regulation for the banks and it is status quo and further implementation of the dodd/frank regular layings. >> are you saying run for the hills? >> no. the majority of bank we cover beat expectations for the third straight quarter driven by improved mortgage and capital market growths. most banks grew earnings book value and we think that can continue into next year. >> what do you think the impact of warren is going to be? sl this a shot at a banking committee? does she have a shot at
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chairmanship? and, if so, do you think she will be any more friendly than at the consumer protection bureau? >> you're kind of hearing mixed things out of people in d.c. clearly as head of the financial protection bureau she was pro consumer. >> so antagonistic? >> yes. and clearly you're until uncertainty right now and bank stocks in general tend not to like uncertainty. >> somebody wrote this morning that -- and this was a joke, obviously, on twitter that she's in a room somewhere with a voodoo doll and sticking pins in it repeatedly. if you're a banker, are you looking at not just a lower return of equity in the next few years, your engine of earnings
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in a lower gear, you have to assume some sort of revved up dodd/frank. now in bigger positions of power. i'm just looking for positives here, jason. >> and a couple of points. you look at the third quarter results and we covered the top 25 or so bank. and in excess of 15% and that's despite record low interest rates. so while that's the lower than they have been historically, not all that bad covering the costs of capital. with respect to dodd frank, our view that it's not going to get worse. there is some hope with the romney victory getting scaled back. it's kind of status quo with that. only one-third of those rules have been written. >> exactly. >> so we have a ways to go on
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that. but the bigger ones, the big outstanding issues, volcker and de derivative reform and what the qualified mortgage rules look like, et cetera. >> jason, it's turning into an interesting day, nonetheless. thanks for joining us on the phone. >> no problem. all eyes are on apple, of course. i want to send it over to bertha coombs. >> that's right, carl. it's now at a six-month low in bear market territory down 20% from the all-time high back in september and it is the biggest drag on the s&p as it outpaces the losses that we're seeing on the overall market, accounting for two points to the downside out of the 30 points to the downside that we're seeing. back to you. >> bertha koom kooms thank you so much. ga
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gary is calling in. >> good morning. let me add a couple of new things. we talked about what was going to happen with the high paying dividend stocks. again, this is going to be an overriding theme for people managing money. and a lot of viewers may not remember this, when i managed money i was primarily a long only manager. i'm not a short seller. but, remember, when you manage money you can be fully invested or you can hold cash. this is is a period between now and the end of the year, much like having cash penalizes you during the late summer, early fall, having cash is a good thing and you're seeing that play out today. as far as a fiscal cliff in europe, there are some concerns. there will be things that come front and center.
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but they really will only involve in making decisions as it relates to the fundamentals of owning stock and that being earnings and p.e.s. remember yesterday we told people to keep their eye on the crb index because it's signaling, if it doesn't hold here, a recession. so when you hear about the fiscal cliff and europe, only think about it as it relates to the u.s. economic growth and nothing else. now, let me give you a couple of positive things if you hear and believe barack obama speaking about reaching out and bringing somebody in from the wall street into treasury, somebody like a larry fink, that's going to be a positive. perhaps the negative rhetoric associated with the industry now that the election is over, that will be a reaching out and that's something that people sort of are grasping at. remember, bernanke is scheduled
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to speak on november toth in new york. that is going to be a discussion that everybody is going to want to hear because you know that bernanke has been the primary factor in terms of driving the market. and let me say just one last thing. the reason i'm not with you and i'm calling in, despite the fact that it's been off the papers. tlf are a million people that are still without power. we were advised to abandon our homes, to basically move out and that the utility company here has decided that they are not going to, at this point despite what they told the public, continue with the restoration. it was amazing to see the exit polls last night that many felt that sandy was a primary driving factor for what they decided. let me just tell you this.
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if you think government is going to help you in a time of crisis, you've got a lot of surprises coming ahead for you. >> well, the government is doing a lot of different things for people in other areas but you're right about -- i saw a report this morning that long island power authority, which we've been talking about for a long time, now has a recorded message if you try to reach them, if you try to contact them. >> well, there's nothing to contact and the information that they have put out -- and i know this because i've done my research myself. i've contacted the governor and i hope coming on air today he will get the message. this is fraud. you give out misinformation, i believe it's fraud. that's hopefully going to get that mess average out. thanks, carl. i'll hope actually see you tomorrow. >> thanks. we're keeping our eye on a second big storm. it's not going to make it any ceasier for the shoreline of the united states. nor'easter atheen na is coming. the impact it's already having on travel. and still ahead, an exclusive
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with at&t chairman and ceo, randall stephenson. "squawk on the street" is coming back in a minute. melons!!! oh yeah!! well that was uncalled for. folks who save hundreds of dollars switching to geico sure are happy. how happy, ronny? happier than gallagher at a farmers' market. get happy. get geico. chances are, you're not made of money, so don't overpay for motorcycle insurance. geico, see how much you could save. or that printing in color had to cost a fortune. nobody said an all-in-one had to be bulky. or that you had to print from your desk. at least, nobody said it to us. introducing the business smart
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we call this our mission. green toys teaches children that if i have a milk jug and i stick it in the recycling bin it can turn into something new. chase allows us to buy capital equipment to be able to manufacture in the states to the scale we need to be a global company. with a little luck green toys could be the next great american brand. find what's next for your business at chase.com/mainstreet dow is down over 300 points but a couple of stocks are bucking the trend today. sort of the hole in the donut but bertha coombs is watching
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that back at hq. bertha? >> yes. it's kind of interesting. telecom stocks are doing well with at&t. and the power stock, you have crown castle at an historic high and amt has come off of the highs but it's at a new 52-week high as well. way to buck the trend today. back to you. >> bertha, thanks a lot. another storm is barrelling up the east coast. meteorologist todd gross is here with what we're calling the nor'easter athena. todd? >> yes. that's what the weather channel has named this winter storm. let's think of this as a knockout nor'easter ark very strong storm that hovers off the northeastern united states from time to time. this one, the most powerful one that we've seen in a couple of years if you don't count the hurricanes like sandy that have come up. you can see the structure of the storm that we're superimposing here. you can see the whole banana and basically it's moving right up into long island, northern new jersey. we're looking at southern
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connecticut and there are several factors with this storm. let's zero in and you can see that there is not just rain but some of the purple areas that we're showing you right here actually and right outside our studios yesterday what you're looking at here are the trees with leaves. it will bring down branches in the act same spots that already lost power last weekend this could be a major issue. heavy rain and snow will be in the cards in addition to coastal flooding in boston and in addition to the wind damage coming up from long island. it's no sandy but the snow could become a very big story this
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afternoon and we'll follow it every step of the way. >> todd, thank you so much. todd gross back at headquarters. when we come back, apple is off of the all-time highs. we'll bring back one bullish analyst to see if this changes his tune or not. and we're staying on top of the major decline. the dow is down more than 300 points and the index has not fallen more than 300 in more than a year. november 21st, 2011. back in a moment.
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now to apple which is in an incorrect territory. it's off the all time high of 705. channing, welcome back. good to talk to you.
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>> carl, you've got to be tired. >> sleep and we're dead. people have bigger concerns, speaking of which, how big of a concern is this selloff to you? well, it's a concern. i don't know where the stock goes. it's going to be tough to find support. for investors there are long-term outlook and you have to look at the valuation. it trading at 11 times this year. and there is probably overreaction but the long-term story is still in tact.
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we're very early on in terms of the job research. the runway is still very large and then tablets, apple has an enormous market share. we expect it to continue and then in the smart term category, still a long run way. it's a chance for investors to get into it. >> you make a nice point but where are the bargain hunters here providing 20% off. they are being awfully patient. >> right. and our position is that it's been a 700 to $750 stock and we expected the fourth quarter of this year will be one of their best quarters ever. i think the first quarter that we saw or the first weekend we
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saw, you know, the tablet sales over 3 million, a lot of that is the one-two punch of the five and this new tablet are going to lead you to the best core. once they have seen those results, it's going to ramp up again. it's lost the technical support but for investors who are looking at a bargain and looking at maybe the greatest technology story ever, this is an opportunity to pick up apple ten or 11 times. i can tell you that 12 months from now the stock will be higher. >> i hear you on valuation and i think a lot of people managing their position and adding more. the change or management has a lot of former engineers who say that the company is not and what
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he left behind is beginning to drive up. >> our biggest concern is if it's apple tv, that's a commodity-like product. they can't maintain a profit margin that they had. we haven't seen that yet. we are still playing the stock on the basis that we believe that this will be be a major play on smartphone and tablet growth and the earnings growth and the biggest concern is when you see more defections out of management and if you start to see talks about a new product category that might not live up to the hyper expectations that we've seen with the tablet and in the near term you might get a
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selloff. and you're right, once we see the growth in these two categories, it starts to fizzle out as an investor we would be very concern the. >> channing, thanks for joining us. >> thank you. at&t raising the quarterly dividend. an exclusive with randall stephenson. and the bell is about to sound across europe. wait until you see the pictures out of athens. simon hobbs has that in just a moment. in america today we're running out of a vital resource we need
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the european markets are closing now. >> the european markets are now closing and it's quite significantly a selloff in world markets and you see it written large across the screen in western europe. the losses have accelerated throughout the session is almost in a straight line and actually in the wake of the obama victory, they started in positive territory and partly because wall street is so heavy. you see it there on the streets
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of athens. and this afternoon, the greek parliament most vote for 13.5 billion and day two of a 48-hour general strike and we will jump as investors through that hoop and talking big about plans for europe, two or three years down the line, let's get a deal over the last month but what everybody else is focusing on and today we learned that industrial production is down, 1.8% in september. still it has mario draghi suggesting and the close down has reached germany and
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yesterday on the program we were talking about a con strax in the economy in the fourth quarter. you can see the way this mounted on and we failed on an important resistance line. let's have a look at the three-month chart here and you'll see what i mean. and that's partly why you saw it accelerating. if you looked across europe, i would say to you, the banks are selling off and you see those in negative territory and if i look right at the bottom in europe,
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these are the guys that you would see. fiat, st micro, all cluttering it up and it's kind of a mix and match. and you don't see the banks. it's not a worsening of the european situation. it's a reflection of the world markets. >> and maybe people are selling what they can sell. that's when you get to this point. things are serious. thanks, simon. what's to blame snl. >> there are several things factoring in here. i want to bring in warren meyers, he's on the floor and i've known him for many years. we were flat and germany was now
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experiencing slow downs and at that point that's when we saw things beginning to move down. and we saw a fall through as a result of the election. there is more to that than just draghi. we continue to drop after the open here and i want to put up the futures and we're sitting off the lows of the day as europe has closed. and they are essentially trapped here. there is a danger here. we've got to lift or you can see people aban doing the positions. >> what we heard from draghi this morning gave people an excuse to sell into the election
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last night and i think that's why you've had this fall through all morning. >> i hate to bring up apple but everybody blames apple for everything. we had an important hit. exactly around 10:50 eastern time, apple dropped through $564. that was precisely a 20% correction. you think, oh, this stuff is a lot of voodoo. it doesn't matter. the rest of the market dropped down. there was kind of a knock, a contributory market. >> absolutely. as you can see apple best of everything getting hit, that sends a shockwave to everybody and all sectors, not just tech. >> coal stocks, bank stocks, defense stocks and energy stocks. these are a bit of obama playing only. >> you have to look at obama and blame the results of the election on those. absolutely. >> very important to find some kind of bottom. very important to find some kind of bottom here fairly quickly.
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guys, back to you. >> bob, thanks a lot. coal stocks getting crushed today. let's send it over to bertha coombs. >> jaw-dropping declines here when you look at the big ones like coal and peabody energy. they got a huge boost following the first debate from romney. it's been a very volatile ride and today they are trading to the down side. >> david faber's exclusive interview with randall stephenson. that's coming up. and the big market selloff continues to accelerate. the dow is now down 349 points. stay with us. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong.
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[ male announcer ] don't just reject convention. drown it out. introducing the all-new 2013 lexus ls f sport. an entirely new pursuit. we turn to traders for some answers, shares of apple sliding into bear territory off 20% off of all-time highs, why investors are falling out of love with apple. and the best stock place for president obama's second term. where should you consider placing your bets? tune in at the top of the hour. >> at&t hosting the annual conference in midtown manhattan. our david faber joins the ce oechlt of at&t for an exclusive.
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>> carl, thank you very much. i'm joined by randall stephenson. you're spending an additional $14 billion. 66 billion in total in terms of capital expenditures over the next three years. you're willing to make a big decision here, randall, and otherwise uncertain, i hate to use that word, environment. why? >> there was a big issue or big question we had when we stepped up to this. we had this fiscal cliff staring us in the face and do we want to step up and make this kind of capital commitment? and i tell you, i have confidence. >> it's required. it's not one of these issues. it's a matter of choice. it's got to be dealt with and businesses have stopped investing, businesses have stopped spending and hiring. just trying to understand and get some clarity as to where
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this goes. and it's going to be dealt with out of necessity. quite candidly, when we step back from this, my question is, where are we going to invest? we're stepping up to this. we're going to invest in a number of areas, particularly or mobility business. and 300 pops of people covering virtually the entire united states. we're going to make another push on broad band investment and we're going -- >> that's your business product, your enterprise business as well? >> we are making a commitment to take fiber to a million businesses across the united states. that's part of our footprint that we will be boodbrand
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capable. it has been the kind of core underlying drivers of what you've seen, mobile application and we're making a further commitment on this. and we're making a commitment on returning cash to our owners and increased dividend for the 29th straight year. >> it's a significant amount. in terms of your dividend and share buyback, they are concerned about those kinds of things? >>. >> we've done half of that to date and will execute on the rest of the share buyback. some will say, why didn't you spend this money years ago? why didn't you spend more to be there in terms of ltd in a more ubiquitous way. we're there now. it's going like this.
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>> quite frankly, if you come back ten years ago, it would have been hard to fathom. and we've gone from second type of mobile networks to third generation networks and now we're going from third generation to fourth generation ltd. it's a phasing of the technology. >> and it takes time? >> it does take time. we started this about six years ago and completed that bill that we committed to about a year ago. >> now, of course, a lot has been made over the last couple of years how much you and
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verizon -- some would argue that it's the duoply of the two carriers, exceed apple. is that ever going to change? >> i don't know. people talk a lot about the subsidies to the handset manufacturers and do we have great concern with that? and the way i respond to it, before the smartphone revolution took off, we were 33% margin company. and revenues were literally -- our data revenues five years later, after the smartphone revolution, we were 40% margin business. our data revenues are now $26 billion business and they are still growing at about 20% year over year. so, you know, smartphones have been a terrific stimulus and driver. >> you're talking about getting margins as high as 45%? >> that's right. >> what gives you the confidence that you can get there? you're investing to reap the benefits of that downgrowth? >> right. to get from today's 40% range to
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45%, quite mechanically it's chunked and we're bringing our churn rate that has been declining for the last five years, we need to continue on that pace. >> you're not going to lose as many people who perhaps are frustrated by a dropped call? >> our quality is the best they have ever been. i feel as good about it now as i ever have. >> sprint, one of your competitors, is going to have a new majority shareholder and a very aggressive man over from japan who said some things, basically, you guys don't know how to provide service here in the u.s. in terms of real products that people really want. and not to mention that your speed is terrible. and what do you think about sprint? >> we look forward to them
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coming to the united states and competing. if you stack the u.s. up against japan, i don't think we're behind japan. when you look at ltd deployment, we're ahead. there may be a six-month advance but the ltd deployment in the u.s. is leading the world. in terms of the performance of our lte network, i would stack up our performance with any in the world. when you look at the competitive network in japan versus the united states, it's a tale of two very different stories. in fact, if you look at japan, the market there, just take the voice utilization, to see the competitive nature of it, in japan revenue per voice minute runs about 18 cents and the average user has about 127 minutes per use. in the u.s., three cents a minute is what it costs the average customer and they use over 900 minutes of use. so the u.s. is a far more
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competitive, a far more dynamic business and industry. and the other difference between here and japan is different and when we talk about putting lte to 300 million people around the u.s., the geography required to build that is dramatic and radically different than what you'll see in japan. we look forward to competing with the u.s. and it's an dynamic industry and it will be when he comes in. >> you've been talking about the fiscal cliff and you spoke about this a bit at the beginning of our interview. you see businesses up close. you see business formation, of course, given your enterprise business. you see the willingness of cios to spend. you're really not seeing a willingness to spend on either from formation in terms of
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business and or the cios? >> i mean, companies are not investing at the levelses that they have in the past. in fact, if you just look at fixed investment, this is as low as it has been in a long time. >> do you think it's because of the fiscal cliff? >> oh, yeah, we saw the reins getting pulled in in may and then in july and we're definitely seeing it being pulled in. people are definitely concerned about the sequester, very concerned about where our tax rate is going, and so obviously folks have stopped hiring and they stopped investing. we see it in our revenue line. >> and if we get it figured out? >> i think there's wonderful upside from this country. i am one of the most bullish people that you'll find on the u.s. economy. i think if we can get this fiscal situation addressed, a tax code more modern and up to date and competitive with the rest of the world, i think what is happening with energy in this country, why people are prepared to invest? technology, i think we ride away
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for three or four year and it's going to be exciting. that's why we're making the investments that we're making. >> good to see you. randall stephenson, ceo for at&t. carl, back to you. >> hanging on every word. david, good stuff. thanks so much. in the men time, the dow is dropping 360 points a few minutes ago, bouncing back a bit. still in unsteady territory. a lot of technical breakdown below key psychological levels. more analysis straight ahead. don't go away. with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade.
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stocks selling off today. mike ryan is the chief investment strategist and joins us this morning from new york. mike, good morning. it could be a little better, i guess, but good morning. what are you saying to clients who call this morning in a panic? >> well, the first thing is, don't panic. let's not forget, you heard simon and heard others talking about, the election is not the only thing happening globally. we have concerns about what mario draghi said. the catalyst behind this recent selloff was not the election resultses. there were other things in play already. we had always viewed how you
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have to look at the immediate period right after the election but then focus on what the problems are and then how we get to a resolution. we want to focus on the fiscal cliff and don't want people panicking because this is not a big broad sell signal. >> right. i know you don't -- it's hard to talk about day to day price action. is today an unwinding of the hopes of people who thought romney would win or is this more of a shift in the larger view of the trajectory of the economy and especially in light of the fiscal cliff? >> i think it's too early to tell. i would argue that it's more not the latter. obviously we didn't see that fall through in the election. i would argue that the macro data has not been signaling to us that we're seeing a marked deterioration. when you look at the economic surprises, they still suggest that even though the expectations are pretty low, the data is getting a bit lower with housing and any employment psych
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ze cycle. >> your note today, you point to the house, the republicans may leverage this partial mandate to the fullest making clashes and stalemates more likely. >> i think what we got after this election is what we heard before the election. that is, we have a divided government. we have a split in the house and senate and i think what you're going to hear more of is who has a mandate. the white house will say, look, we won the electoral college and we held the senate and the republicans will say, hold on, not so fast. the popular vote was very close. we actually maintained our lead in the house and we actually gained some seeds in terms of some of the governor ships. i think what you're going to see is the two sides are going to you go g through the period with heated rhetoric, political posturing and then they sit down with serious discussions about addressing the issues. randall talked about it before, we have to start addresses this in a serious manner or this does represent a significant threat.
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>> yeah. it's hard to trade. who knows if boehner and the president come out holding hands. that changes everything. it's a long runway between then and now. thank you so much, mike. >> thanks, carl. just like the markets, apple is falling hard. we'll explain why apple is so important to the market at large and what you need to know. next. tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again.
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apple, as you know, is seeing a big slide today. a big patent suit adding to the pressure. i'd hate to be the legal counsel at apple this week. >> what a week for apple. it's well worth watching with smart people on both sides here. last night, a jury awarded a lump sum of $368 million in he path tent infringesment case against apple for use of the security software. that's half of what the company wanted to get. this is far more but in a nutshell, virnetx goes into the patent control category and now
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apple, and a few other. bull is betting that it's another qualcomm with everybody pays a royalty. i say it's more like a biotech company and nobody really knows what is going to happen. in the meantime, the 3$368 million, it goes into an escrow account until the case is ultimately settled. carl, back to you. >> in the wake of the is samsung trial which was so overwhelmingly positive for apple, i wonder if you think their legal strategy just got over aggressive? >> remember, they are going to appeal this. if they appeal this, this is a chump change sort of situation. i say they either take it all the way or they basically try to strike some deal that is advantageous to apple. >> people talk about valuation. >> are you talking about apple? >> apple is not over yet. i think it's -- i've written about it going down but i think it's one to